Home Values Slip After Nearly Four Years of Growth

Slowing home values could bring good news for buyers as rents continue to climb

- U.S. home values rose three percent year-over-year, down from 3.4 percent annual growth in June.

- Denver, Dallas, San Jose, and San Francisco are still experiencing double-digit home value increases.

- Rents continued their rapid appreciation, up 4.2 percent from last July.

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Aug 25, 2015, 08:00 ET

SEATTLE, Aug. 25, 2015 /PRNewswire/ -- The housing market is slowing down, with home values seeing the first negative monthly change since the market began its recovery nearly four years ago, according to the Zillow® July Real Estate Market Reportsⁱ.

Nationally, home value appreciation is leveling off after its rapid pace in the early years of the recovery. Homes lost 0.1 percent of their value in July, falling to a Zillow Home Value Indexⁱⁱof $179,900. Homes appreciated three percent on an annual basis, down from 3.4 percent in June.

Of the 517 metros covered by Zillow, 204 saw a slowdown, including major metros like Washington, DC and Cincinnati, where home values declined month-over-month in July. The slowing appreciation is a sign that the market is returning to normal; economists have expected to see growth flattening out as the recovery continues.

Even hot markets like Denver, Dallas, San Jose and San Francisco, which had double-digit annual home value growth in July, saw their monthly appreciation rates ease from June.

"This slight dip in home values is a sign of the times. Many people didn't think it was happening, but it is: we're going negative," said Zillow Chief Economist Svenja Gudell. "We've been expecting to see a monthly decline as markets return to normal. However, this is not like the bubble bust. We're not going to see 10 percent declines. The market is leveling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure."

Slowing home values could provide more opportunities for hopeful buyers who have been waiting on the sidelines for the market to cool off. More homes may be coming online as homeowners who have been watching strong home value growth decide to list their houses as appreciation slows and smaller gains are expected. This could help ease the constrained inventory the market has been facing for the past several months.

Meanwhile, rents continue to grow at a rapid pace, up 4.2 percent from last July to a Zillow Rent Indexⁱⁱⁱof $1,376. With no sign of rents slowing down and the potential for more homes for sale, conditions may be right for buyers to enter the market.

Metro Name	July 2015 Zillow Home Value Index (ZHVI)	Month-over-Month % Change in ZHVI	Year-over-Year % Change in ZHVI	July 2015 Zillow Rent Index (ZRI)
United States	$ 179,900	-0.1%	3.0%	$ 1,376
New York-Northern New Jersey	$ 384,100	0.1%	1.5%	$ 2,361
Los Angeles, CA	$ 536,400	0.1%	2.6%	$ 2,513
Chicago, IL	$ 190,700	0.4%	2.6%	$ 1,621
Dallas-Fort Worth, TX	$ 166,300	0.9%	13.3%	$ 1,480
Philadelphia, PA	$ 201,400	0.0%	0.1%	$ 1,586
Houston, TX	$ 161,000	0.8%	7.5%	$ 1,533
Washington, DC	$ 356,500	-0.5%	-0.7%	$ 2,109
Miami-Fort Lauderdale, FL	$ 219,200	0.6%	8.9%	$ 1,815
Atlanta, GA	$ 157,600	0.3%	5.8%	$ 1,262
Boston, MA	$ 370,900	-0.1%	2.5%	$ 2,228
San Francisco, CA	$ 756,100	0.6%	11.0%	$ 3,285
Detroit, MI	$ 118,500	0.7%	6.4%	$ 1,122
Riverside, CA	$ 287,800	0.0%	4.6%	$ 1,693
Phoenix, AZ	$ 201,900	-0.2%	4.0%	$ 1,267
Seattle, WA	$ 352,100	0.2%	6.6%	$ 1,892
Minneapolis-St Paul, MN	$ 212,300	-0.1%	2.6%	$ 1,527
San Diego, CA	$ 481,400	0.2%	5.2%	$ 2,344
St. Louis, MO	$ 135,700	0.3%	5.6%	$ 1,132
Tampa, FL	$ 152,700	0.5%	6.4%	$ 1,295
Baltimore, MD	$ 240,800	-0.3%	-0.6%	$ 1,735
Denver, CO	$ 300,300	0.4%	13.9%	$ 1,931
Pittsburgh, PA	$ 124,500	0.0%	1.5%	$ 1,099
Portland, OR	$ 291,900	0.7%	7.9%	$ 1,665
Sacramento, CA	$ 337,700	-0.1%	5.0%	$ 1,680
San Antonio, TX	$ 149,600	0.7%	3.3%	$ 1,329
Orlando, FL	$ 173,900	0.6%	5.2%	$ 1,338
Cincinnati, OH	$ 136,400	-0.5%	1.0%	$ 1,259
Cleveland, OH	$ 123,100	0.4%	2.5%	$ 1,150
Kansas City, MO	$ 142,300	0.6%	3.8%	$ 1,237
Las Vegas, NV	$ 189,700	0.4%	5.9%	$ 1,209
San Jose, CA	$ 891,500	0.7%	11.5%	$ 3,393
Columbus, OH	$ 148,800	0.2%	4.2%	$ 1,266
Charlotte, NC	$ 160,800	0.1%	3.7%	$ 1,250
Indianapolis, IN	$ 132,400	0.4%	3.0%	$ 1,202
Austin, TX	$ 232,900	1.0%	7.9%	$ 1,692

About Zillow
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

ⁱ The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.
ⁱⁱThe Zillow Home Value Index is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
ⁱⁱⁱThe Zillow Rent Index is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars.

SOURCE Zillow